Consider the instrumental variable regression model Yi = 0 + 1Xi + 2Wi + ui, where Xi
Question:
Yi = β0 + β1Xi + β2Wi + ui,
where Xi is correlated with ui and Zi is an instrument. Suppose that the first three assumptions in Key Concept 12.4 are satisfied. Which IV assumption is not satisfied when:
a. Zi is independent of (Yi, Xi, Wi)?
b. Zi = Wi?
c. Wi = l for all i?
d. Zi = Xi?
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a Instrument relevance does not enter the population regression for b ...View the full answer
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Related Book For
Introduction to Econometrics
ISBN: 978-0133595420
3rd edition
Authors: James H. Stock, Mark W. Watson
Question Posted:
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